Monday, November 24, 2014
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What's the purpose of GSK's Open Office?

GlaxoSmithKline claims the "open plan" for its new office building near the naval shipyard creates "flexible and transparent spaces" that will encourage face-to-face collaboration, thereby reducing the amount of time wasted by email communication. According to the company, the altered work pattern resulting from the new design will speed up the decision-making process. As an added sop to employees, GSK also claims the configuration at its new Philadelphia office conforms to the current fad for standing while working at the computer or talking on the phone. Supposedly, standing on one's feet, as opposed to long periods of sitting, reduces orthopedic problems and improves cardiovascular health.

What’s the purpose of GSK’s Open Office?

GlaxoSmithKline claims the "open plan" for its new office building near the naval shipyard creates "flexible and transparent spaces" that will encourage face-to-face collaboration, thereby reducing the amount of time wasted by email communication.  According to the company, the altered work pattern resulting from the new design will speed up the decision-making process.  As an added sop to employees, GSK also claims the configuration at its new Philadelphia office conforms to the current fad for standing while working at the computer or talking on the phone.  Supposedly, standing on one's feet, as opposed to long periods of sitting, reduces orthopedic problems and improves cardiovascular health.

If keeping people on their feet improves employee wellness, arrangements for standing at the PC don't require redesigning an entire office building.  People can and do work on their feet in spaces designed for offices and cubicles. 

For example, when a jet plane crashed into the Pentagon in Washington on 9/11, Secretary of Defense Donald Rumsfeld was already standing at his elevated work table, wondering how he might justify an invasion of Iraq.  After Rumsfeld and Dick Cheney misled the country into a war, Rumsfeld again stood at his desk in a guarded office and approved requests to torture prisoners.  One method in particular involved "softening up" detainees by keeping them on their feet for twelve hours at a time.  Rumsfeld scribbled in the margin that the tactic hardly seems coercive because he stands on his feet for eight hours every day.  So office buildings designed as bullpens, atria and "open prairies" aren't necessary for keeping office workers standing around all day.

The claim that open offices can accelerate pharma's decision making also appears unpersuasive because the industry's lethargic pace isn't due to any lack of face-to-face communication among mid-level employees.  Compared to twenty years ago, it seems that mid-managers now spend all day, every day in meetings.  Insufficient face time hardly appears to be the a problem.  To the contrary, someone has to wonder whether mid-managers in pharma these days can ever snatch any time away from those mind-numbing sessions and find enough repose to think through their assignments.

Instead of inadequate face time, pharma's slothful decision making comes from the multiple levels and numerous departments that must approve even the most mundane proposals.  Some of that results from the fact that it is regulated industry with a ten-year lead time for product development.  The longer a roast remains in the oven and the more dietary restrictions the meal must accommodate, the greater the number of cooks that will come into the kitchen.  That means few if any changes occur unless the legal counsel's office, finance, purchasing  and several other functions sign onto something.  This system with many layers, where every department holds veto power, doesn't result from just an outmoded org chart can't accommodate the current pace of business.  Instead pharma companies operate with all these time-wasting layers because senior managements want a top-down, command-and-control system that emphasizes process and CYA cautiousness rather than innovation.

Consider the role of finance as an example.  The primary function of a CFO and his minions at a pharma company these days is to keep current management in control of the company.  They do that by distracting shareholders with a style of operations management based on quarterly earnings and share price.  So if an approaching quarter appears to be light on operating income and/or earnings, finance dictates a better report by demanding expense cuts, either from firing people, curtailing R&D or stinting some other area that is vital to the company's long-term prosperity. 

As an industry with a long lead time for developing new products, effective pharma management requires a long-term view.  On the other hand, management's tenure requires placating the market's quarterly attention span.  In any contest between wise, long-term strategy and keeping current management in the saddle, the latter always wins.  That means management gives finance the head chair at every table where decisions are made.

The legal counsel's office provides another source of interminable delay.  The main function of legal counsel lies in steering the company clear of lawsuits and criminal indictments that can embarrass top managers or reflect poorly on their judgment.  Once again, a department's primary purpose consists of keeping top managers on the gravy train.

Lawyers impede decision-making the way a flat tire slows down a car because top managers are aware that news appeared every week, for more than a decade, in which one pharma company or another paid a billion dollar fine on matters involving illegal and unethical operating patterns.  The answer to this from the C-suites consists of having someone from the legal counsel's office sitting in as the naysayer on every operating group. 

People from the counsel's office justify their presence because management believes they can extinguish small fires and prevent them from becoming big ones.  This only encourages the lawyers to confirm their importance by going around the company and starting fires.  The net result chokes the life from what managers must do keep a company prospering.  Achieving growth in business usually requires taking some calculated risk, but an extreme aversion to risk constitutes the essence of corporate lawyers. 

The purchasing and human resources departments also impede decision making.  Purchasing people operate as the henchmen for finance.  They rely on idiot-savant cost formulas that reduce all services to commodities.  With these criteria in hand, they demand that suppliers submit bids on razor-thin margins.  Their handiwork resulted in a raft of defective Johnson & Johnson products and several scores of recalls across all of the company's divisions during the past four years.  But recalls matter little to finance and purchasing.  J&J's stock remained a darling of Wall Street even when the recalls were at their peak.  So if a topic requiring a decision involves an outside supplier, the purchasing department will make its delaying presence felt.

Human Resources serves two related functions.  First, they want to eliminate or reduce the possibility that wronged employees will sue the company and, secondly, in a general sense, they apply the findings of psychology to create a workforce of cheerful robots.  If pending decisions can hold major consequences for current employees, HR will have its say and that means still more delay.

If an open office style seems unlikely to make pharmas into the sort of fast-paced, decisive companies usually associated with IT, then what is the real purpose behind this interior design plan?

A perusal of architectural and business history reveals that open offices were in vogue during the late 19th and early 20th centuries.  Managements at the time used similar blather about enhancing communication and reducing hierarchy to extol its merits.  The reality underlying open offices in 1901 is that they allowed shift supervisors and other managers, usually working several feet above the bullpen, to look out a large window and see if the employees arrayed beneath them were busy at their ledgers or were goofing off by talking on the phone and reading the Police Gazette.

What motivates companies today to create open offices?  A clue comes from a cardinal feature of the open office plan -- no employee maintains an assigned space.  The procedure is that every employee comes to the office each day with his/her laptop and finds whatever work area happens to be available.  At the end of the day, no pictures of the kids or Phillies baseballs from 2008 remain behind to show that Martha or Barry was ever there.  

People who have worked in open environments claim the process can make it extremely difficult to locate their transitory co-workers.  That seems predictable, but pharmas are willing to take on such problems because they believe an open environment provides the infrastructure for the sort of part-time, project-based, bracero workforce they intend to create.  No longer will regulars miss Fred or Diane when they're not in their usual places down the hall from the elevator or just past the copy machine.  Instead there won't be any usual places and Fred will be gone from the company for at least two months before anyone thinks it odd that nobody's seen him. 

The open office is to workplaces what the open marriage is to domesticity.  Both arrangements involve questionable commitments and dubious loyalties that allow the parties to maintain the fiction of a stable union while conducting dalliances.  As an approach to marriage, an open arrangement at least has the theoretical virtue that both parties know what they're getting into.  It remains to be seen if people working in an open office are aware they're being transitioned into migrant contractors.  In the workplace, only the employer continues to philander while the employee is played for a sucker.


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Daniel R. Hoffman, Ph.D. President, Pharmaceutical Business Research Associates
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Check Up covers major health events in our region and offers everything from personal health advice to an expert look at health reform. Read about some of our bloggers here.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section

Michael R. Cohen, R.Ph. President, Institute for Safe Medication Practices
Daniel R. Hoffman, Ph.D. President, Pharmaceutical Business Research Associates
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